Apple Eyes 13-Inch iPad Hybrid? 8 Signs

As Mac sales fall, clues mount that Apple is prepping a 13-inch iPad-laptop hybrid. Microsoft, HP and Dell can't be happy about that.

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For at least the third time since July, reports are circulating that Apple is developing a larger iPad, possibly with an attachable keyboard that would turn it into a notebook, a la Microsoft's Surface tablets.

Barclay's analyst Ben Reitzes provoked the newest round of speculation, predicting in a research note that an iOS tablet-notebook hybrid could disrupt 25-30% of the shrinking PC market. The hit to laptop and desktop sales could be similar to the damage iPads and other tablets have already wrought, Reitzes said.

This forecast paints a potentially grim picture for Microsoft, HP, Dell and other major PC players still finding their bearings in the mobile space. But let's not get carried away. An iOS-infused TV has been hotly rumored for years, but it's still the stuff of Apple fans' unrequited hopes. The same might end up being true of the alleged plus-sized iPad.

Indeed, CEO Tim Cook has spoken critically of laptop-tablet hybrids. He dismissed the devices in April, comparing them to a product that tries to be both a toaster and refrigerator. Last fall he characterized Microsoft's original Surface as compromised and confusing.

Then again, the iPad Mini has become one of Apple's most important products, even though co-founder Steve Jobs said before his death that the company would never build such a device.

Is it likely a 13-inch iPad-laptop hybrid is in the offing, despite Cook's earlier misgivings? Forrester analyst David Johnson told InformationWeek in September that such a product has "interesting potential," noting that many people already use third-party keyboards with their iPads. Here are eight signs Apple is prepping a large-screen iOS product.

1. Apple's been thinking about laptop-tablet convergence for a long time.

Apple's product line doesn't include touchscreen MacBooks or convertible iPads, but the company began filing patents based on these designs long before Windows 8 or Surface tablets were on the market. The patents range from a dock that turns an iPad into an iMac, to an attachable iPad keyboard that runs on solar power, arguably an ideal accessory for a 13-inch model, as Reitzes pointed out.

Apple's knack hasn't traditionally been to invent new technologies as much as to recognize when and how to bring new tech to market -- a point Apple VP of software engineering Craig Federighi alluded to last month when he told BusinessWeek, "New is easy. Right is hard." Having clearly given convergence a lot of thought, perhaps Apple finally feels it can do hybrids right.

2. Multiple sources have claimed a 13-inch iPad is in the works.

Supply-chain rumors don't always pan out, but where there's smoke there's also often fire. Citing supply-chain sources, the Wall Street Journal reported in July that Apple was experimenting with a 13-inch iPad. Japanese website Macotakara reported in late September that a larger iPad was already in production for a planned 2014 debut, and that Taiwan-based manufacturer Quanta, a longtime Apple partner, was building them. DisplaySearch VP David Hsieh said this month that supply-chain research indicates a 12.9-inch model with 2732-by-1536-pixel resolution will arrive next year.

3. Apple reportedly is working on a power adapter for a new mobile device that will sit between current iPads and the MacBook Air.

Citing inside sources, AppleInsider reported in early September that Apple is working on a power adapter that draws more wattage than today's iPads but far less than a MacBook Air. The site said the power supply is for a new portable product that will be released in the next year. It speculated the product could be for a plus-size iPad, or perhaps even an iOS notebook -- conjecture that lines up with the aforementioned supply chain reports.

4. The A7 processor will bring desktop-class power to the iPad.

The iPhone 5s's 64-bit A7 processor is more powerful than desktop chips were just a few years ago. The 5s benefits from the extra power, but the A7 could really shine in devices with larger screens. In addition to providing more computational muscle, 64-bit processing allows a device to support far more than 4 GB of RAM. The 5s uses only 1 GB -- but a 13-inch, Retina-equipped iPad hybrid would demand much more.

5. Apple's A7 chip could allow an iPad to run PC-style apps.

If Apple introduces a larger iPad with a keyboard, more apps will have to accommodate both touch-oriented and laptop-style operation. Apple's iOS 7 documentation teases the possibility of an iOS device that runs desktop apps, noting that "the architecture for 64-bit apps on iOS is almost identical to the architecture for OS X apps, making it easy to create a common code base that runs in both operating systems."

OS X and iOS already share certain aesthetic cues, and are becoming increasingly connected via iCloud. But the documentation's tone, which superficially evokes Microsoft's Windows 8 strategy, suggests deeper convergence is in the cards. The current iPad is too different from a laptop to make a unified code base broadly appealing -- but a 13-inch iPad with attachable keyboard could be a different story.

Number one on the list is that they must learn how to be a great communicator. They do very little advertising and most of it is poor and off message. This perpetuates a vacuum between the company and its core markets. Whereas Apple knows how to make (and keep) that connection. The same applies to Microsoft partners. Lack of direction and poor communication alienates many partners. MS recently began surveying the partner ecosystem to find out what's wrong. I guess that's a start.

Number 2 is that Microsoft needs to learn the difference between strategic and tactical - especially as it applies to product markets. Surface is a prime example. On the high end, they go up against the iPad with a product that is little more than a small laptop. On the low end, they don't produce a "mini" Win8 Pro to cover that market. Instead, they come out with a mid-priced Surface that runs RT and has no ecosystem. This is all tactical with no clear advantage to their approach. They need to be strategic in their efforts.

Lastly, MS needs to greatly simplify how users interact with their devices and services. Take SkyDrive vs. Drop Box for instance. I clearly like SkyDrive better because of its capabilities. However, just setting up a SkyDrive account vs. one for Drop Box is infinitely more difficult. Why? Microsoft documentation is horrible. If the software is non-intuitive then the last resort is the availability of high quality documentation and training to make their products easier to learn and use.

A company of Microsoft's size has plenty of resources available to solve all of these problems. And they should (need to) do it in a hurry.

"Microsoft has the right idea about convergence but they have executed poorly (along with their OEM partners)."

I think that's a pretty fair statement. Some of the pieces are starting to align. I think for a certain type of person, for example, that the new Surface tablets could be terrific devices, thanks in no small part to the fact Microsoft's services look to be much better integrated this time. The old Surfaces were compromised in at least some way regardless of one's needs, but with the new ones, I don't think that's the case. But I still think both tablets are niche products, and Microsoft spent the last year basically negating every good idea it had with some kind of execution error.

I can't really speak to whether the 25-30% stat is reasonable. Reitzes seemed to base it off the extent to which tablets have already cannibalized PCs, though if he means 25-30% of the remaining PC market, that would obviously change the comparison a bit. Either way, it's a bullish estimate.

Personally, I probably wouldn't be so bold. I don't think an iPad convertible will announce a new world order overnight.

That said, I have no doubt Apple would sell millions of devices, and that the product could impact Ultrabook and Windows tablet sales in meaningful ways. I agree that many people buy PCs either because they need Windows software, or because they need a more powerful machine. But today, a lot of people need neither power nor Windows software, which is one reason tablets are so popular in the first place. But even these users occasionally have to type, and there's enough data to suggest a lot of them would be interested in a device that gracefully integrates keyboards but still provides a luxury tablet experience, in terms of both build and ecosystem. Some of these people might have bought an iPad alongside a cheap laptop in the past, but now they might go for a single device. I think Apple can live with cannibalizing some of its own iPad sales if it eats into more sales of Windows devices.

And even power users could be attracted to this hypothetical device. It might not run Windows software, but the A7 chips can do things that desktop class chips gained the ability to do only a few years ago. If Apple releases a device and builds a user base, I have little doubt that important apps (e.g. not all of them, but the ones that would be important for this form factor) will follow.

Does this add up to 25-30%? Who knows. But I think it could be more than a few percentage points.

Then again, new supply chain rumors over the weekend suggested Apple will release some kind of new 12-inch MacBook this year. If so, perhaps the iPad convertible isn't as far along as some other rumors have claimed; it's hard to know how Apple would market both a plus-sized, keyboard-equipped iPad alongside a laptop of similar dimensions.

My sense is that this will become a real product. And... sooner rather than later.

People simply prefer iOS over OS X (and Windows) when it comes to the tablet/hybrid market. And they prefer the tablet/hybrid form factor over laptop/desktop. A larger screen on a more powerful hybrid (convertible) device running iOS with productivity apps is a killer device.

The Windows platform risks loss of relevance if they don't get the OS and hardware in line with customer expectations. Microsoft has the right idea about convergence but they have executed poorly (along with their OEM partners).

I will say it again but I think it would be a tragic mistake for MS to release Office on the iPad (small, medium, or large). This will potentially gut their entire Windows client business (hardware and software).

"(A)n iOS tablet-notebook hybrid could disrupt 25-30% of the shrinking PC market" Hmmm, does that make any sense? Most PC users use PCs because the apps they want run on Windows, or they need a more powerful (for many values of "power") device than a tablet. I'd guess that the market for *Apple* PCs might take a 25% hit, but I don't believe for a second that Apple coming out with a bigger tablet/notebook hybrid will impact the WinTel market more than a couple of percent at most.

The move from a tablet to a tablet-laptop hybrid makes perfect sense. If the Apple hybrid tablet doesn't become a reality, I've been wondering if there will be more even integration between iOS and Mac OS X?

Just because the server market's in the doldrums doesn't mean innovation has ceased. Far from it -- server technology is enjoying the biggest renaissance since the dawn of x86 systems. But the primary driver is now service providers, not enterprises.